How to Start Forex Trading with $100

Free $100 Forex No-Deposit Bonus

Unlike the futures or options markets, you can actually start trading with as low as $100 in the forex market. Forex is a leveraged market, which means you can use a little money to trade up to 20 or 30 times the amount you will be required to stake in a trade (UK and Europe), and sometimes even as much as 500 times your required investment amount (known as the margin). This makes the idea of trading forex quite interesting to many. However, trading with $100 in the forex market, even if you have access to a leverage of as high as 1:500, comes with its own set of challenges and rules. This is what this article is all about.

What Can’t You Do With $100 in Your Forex Account?

Here are some things a $100 forex account cannot do for you.

  1. It will not enable you to quit your job to start trading full-time. There are countries on this earth where $100 is the equivalent of one day’s rent. It is simply impossible to make $100 a day from $100 capital to survive in such places. Of course, other personal and household bills have not been added to the mix yet.
  2. You will not become the next Warren Buffett or George Soros overnight. You cannot start trading with $100 and expect to start rubbing shoulders with these guys in terms of monthly earnings from trading.
  3. You will not grow to $10,000 or $100,000 in a month. We have been seeing such ads coming from advertisers of forex robots and other affiliated software. We also see such ads in the binary options market, as many traders were told that they could achieve this using the short term expiry trades. Forget it: it will not happen.

What Can You Do With $100 in Your Forex Account?

However, there are positive things you can do with your $100 forex account. You will be able to do the following:

  1. How to Start Forex Trading with $100Learn vital lessons about money management. Since you already have restricted capital, you will learn how to use the little you have very wisely. Most responsible people who are down to their last $100 in the real world will certainly not use it to go gambling or plunge the money into some crazy stuff. They are more likely to use it very wisely and judiciously. So why can such attitudes not be brought into the world of forex trading?
  2. You can use your $100 forex account to make a smoother transition from the world of virtual trading to the world of live trading. Many people make the mistake of switching from a demo account to a heavily funded live account. This is not a good way to make the transition. Conditions in a live account are very different from the world of demo trading. A live account will mean you are now trading at the level of the broker’s dealing desk with real money. The brokers are also reselling positions to you that were acquired from the interbank market with real money. You can never compare shooting practice with blanks to live fire in a real war situation. That is why soldiers are first started off with blanks and proceed to live fire training before being deployed to a hot zone. Any soldier can relate to this. It’s the same process in forex trading.
  3. Emotional control is a lesson you can learn from a $100 account. Learn to trade with real money, but not so much as to make you lose sleep. That way, you can condition yourself to what the real money trading situation will bring.

How to Start Forex Trading with $100

These days, the process of opening and funding a forex account has been made very easy. You can do this in a matter of minutes using any of the payment methods available from the broker. After funding your account, you can then trade forex with $100 following these rules.

Rule 1: Money Management

The first method is to trade with money management as the number 1 focus. This money management-focused method means that you will trade with no more than 3% of this money in total market exposure. This means you can only trade micro-lots ($1000 minimum position size). If you hold an account with a UK or EU broker, you can only use a maximum leverage of 1:30. With a margin of 3.33%, this means that you cannot trade within the boundaries of risk management with an EU broker, as you will need at least $33 to trade 1 micro-lot. However, a brokerage in Australia, South Africa or any of the other popular offshore jurisdictions still offer leverage of up to 1:500. A micro-lot would therefore need just $2 commitment from the trader, which keeps the position within allowable risk management limits.

Rule 2: Risk-Reward Ratios

The next rule has to do with risk and reward. Risk refers to the Stop Loss (SL) you will use, and reward has to do with the Take Profit (TP) setting. You should target to make 3 pips in profit for any 1 pip risked as stop loss. Using your allowable money management that restricts you to 1 micro-lot positions, this means that you should be prepared to target $6 for every $2 used in the stop loss. This translates to at least 60 pips TP, and 20 pips SL.

Related: How to Set the Stop Loss (SL) and Take Profit (TP) Targets

This means that you have to be super-selective of your trades. Only enter into trades where there is a high chance of winning, and use well-defined parameters of support and resistance to target your setups. Fortunately, some chart patterns such as the flag and pennant have standardized profit targets, and the pattern boundaries can also help define the stop loss.

Rule 3: Avoid the News Spikes

News trades are highly unpredictable, especially within the first few minutes of a news release. The spikes and whipsaws can easily stop your trades out. With such limited capital, you should avoid news trades like a plague.

Ultimately, you will need to work on getting more capital, but by the time you do, your $100 journey in forex trading would have prepared you adequately to trade larger capital responsibly.

List of Forex Brokers That Accept $100 Deposits

BrokerInfoBonusOpen Account
FBS Markets Inc forex broker Min Deposit: $1
Spread: From 0 Pips
Leverage: 3000:1
Regulation: CySEC, IFSC
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OCTAFX forex broker Min Deposit: $5
Spread: From 0.2 Pips
Leverage: 500:1
Regulation: FSA (Saint Vincent and the Grenadines), FCA UK (#679306)
50% Deposit Bonus, Real contest 1st prize Luxury car BMW X5 M, Copy trading, Trade&Win.Visit Broker
xm best forex broker Min Deposit: $5
Spread: From 0 Pips
Leverage: 500:1
Regulation: ASIC, CySEC, FCA (UK), IFSC Belize
“50% +20% deposit bonus up to $5,000, Loyalty Program BonusVisit Broker
exness forex broker review Min Deposit: $1
Spread: From 0 Pips
Leverage: 2000:1
Regulation: FCA UK, CySEC, FSP, BaFin, CRFIN
35% of the account DepositVisit Broker
No Deposit Bonus Instaforex Broker Min Deposit: $1
Spread: Fixed Spread From 3 Pips
Leverage: Up to 1:1000
Regulation: CBR, CySEC and FFMS
30% Forex Deposit bonusVisit Broker

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